News Desk: A 2017 amendment to India’s maternity leave law was followed by a decline in women’s employment and an increase in men’s employment at covered manufacturing firms, according to a new study. The findings have raised concerns about how maternity benefits are financed and whether existing policies may unintentionally discourage employers from hiring women.
The study, titled Mandated Maternity Leave and Labour Substitution: Firm-Level Evidence from India, found that women’s employment at covered manufacturing firms fell by 8.4% following the amendment, while men’s employment increased by 2.6%. The number of days worked by women declined by 9.5%, compared with a 2.1% increase for men.
The research was published in August as part of the IZA Discussion Paper Series by the IZA@LISER Network. Researchers Souvik Banerjee, Preeti Jaiswal of IIT Bombay, and Sankar Mukhopadhyay of the University of Nevada, Reno, analysed data from India’s Annual Survey of Industries covering the period from 2012-13 to 2019-20.
According to the study, firms hired fewer women and more men after the law came into effect. However, researchers found no significant changes in firms’ output or profits. The impact was more pronounced in industries with a higher proportion of women workers, where female employment declined by 12%, while male employment rose by 4.1%.
The Maternity Benefit (Amendment) Act, 2017, increased paid maternity leave from 12 weeks to 26 weeks for women having their first two children. It also introduced provisions requiring establishments with 50 or more employees to provide crèche facilities within a prescribed distance, with eligible women employees entitled to four visits a day.
While the amendment aimed to strengthen maternity protection, employers were required to bear the cost of the leave. Researchers suggest that this financial responsibility may have influenced recruitment decisions, leading some firms to substitute female workers with male employees.
Harshil Sharma, a labour studies expert, said similar barriers could be seen in sectors such as construction, where employers may avoid hiring women because of additional welfare and safety obligations. He also highlighted the continuing gender gap in employment across different industries.
To address these concerns, the researchers recommended shifting maternity leave financing from individual employers to a social insurance system. They also suggested introducing government-funded paternity leave and extending maternity protections to workers in the informal sector.
The findings underline the need to balance maternity protection with equal employment opportunities. Experts say policies that distribute the financial responsibility more widely could help protect women’s rights without creating unintended barriers to their recruitment and career growth.
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